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Dev Update #4

My progress in the week of Oct. 31 - Nov. 4

What I Have Done Since Last Update

Currently I have been working on two research projects with Barnabé:

Rollup economics framework

On the rollup economics project, I mainly conducted preliminary research on Arbitrum rollup protocol. The main goal is to understand Arbitrum rollup mechanism, how it works on the fundamental level and its fee economics. The result of this preliminary research is the following (on-going) post :point_right: here.
My teammate has been working on Optimism rollup and we had a meeting this Friday morning to discuss the progress we have made so far and next step plans.

In the meantime, I setup my GitHub repository for collecting data on L1/L2 transactions using Infura web3 API. I was able to extract data on detailed block-level and transaction-level characteristics from both L1 and L2.

Ethereum economic model review

My progress on Ethereum economic review model has been on cadCAD class on Ethereum economic model. I have finished cadCAD Bootcamp (Beginner Level) and about to start masterclass.

Work Plans for Next Week

Rollup economics framework

I will continue working on preliminary research on Arbitrum rollup. This includes reading articles/posts on the subject, exploring dashboards for rollups and reviewing my teammate's work on Optimism protocol.

In addition, I will work on parsing the data extracted from L1/L2 using my repository. We want to have as detailed data as possible for rollup economics analysis.

Ethereum economic model review

For the economic model review, I have two main goals for next week.

  1. Continue reading on the subject, and
  2. Finish at least three sections (total five sections) of cadCAD masterclass on Ethereum economic model.

Status Update on My Reading List

My reading list has been expanding exponentially, so I will not post the list here. I plan to create a new note, exclusively recording my reading list and my progress with this reading list over the course of the program.

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radCAD-Ethereum Economic Model Study Note

In this notebook, I study CADLabs Ethereum Economic Model in detail. The goal of this study is to understand the simulation model in detail and apply it to my own research on Ethereum blockchain (and layer 2) economics by extending the model to specific scenarios that I am interested in. One high level question we can explore in our research is as follows: What are the effects of Ethereum Proof of Stake Consensus Mechanism on Validators Revenues and Yields under Different Validator Environments and Network Scenario? High Level Overview of the Model The first step is to have a high-level overview of the model before diving deep into its individual components. In my view, the entire CADLabs Ethereum economic model consists of three main parts: Data: Historical data on ETH price, gas price, block rewards, used gas, and ether supply.

Mar 29, 2023
++Summary Note++: Empirical Analysis of EIP-1559

Article: Empirical Analysis of EIP-1559: Transaction Fees, Waiting Times, and Consensus Security This article was shared by many people when it first came out last year. I finally had a chance to read it thoroughly and understand the research problem in more details. I will highlight several key components of the article below: Main Research Problem The main research problem is to study the effect of EIP-1559 on several important aspects of Ethereum blockchain. Research Questions Three research questions are proposed in the article.

Feb 25, 2023
++Summary Note:++ Transaction Fee Mechanism Design for the Ethereum Blockchain

In this summary note, I will review and discuss two articles I have read in detail in the past several days. Article #1: Transaction Fee Mechanism Design for the Ethereum Blockchain: An Economic Analysis of EIP-1559 This article was written by Tim Roughgarden, who is a professor of computer science and member of Data Science Institute at Columbia University. I thoroughly enjoyed reading this article and learned a lot. The article mainly discusses game-theoretic strengths and weaknesses of Ethereum EIP-1559 by focusing on incentive-compatibility. Two major takeaways for me is the following: ++Block space is the scarce resource++. Each block has a target size of 15 million gas, which represents a limited computational capacity in layman's term. Therefore, users must compete for this limited resource such that their transactions can be included in a block. EIP-1559 effectively reduces the ++variation of transaction fee++, not the transaction fee itself. Reducing transaction fee is a scalability problem, not a TFM design problem. A direct implication of this outcome is easy fee estimation and improved user experience as a result. The variable blocksize flexibility reduces delays for some customers during the high demand period, thus also improves user experience. In addition, EIP-1559 achieves all those positive impacts without compromising security of the network.

Feb 25, 2023
Setting Up an Arbitrum Full Node

In this post, I share my own journey of setting up and running an Arbitrum full node in December. This process requires setting up an Ethereum full node as a prerequisite. In order to interact between L1 and L2, we need to run an L2 node as well as an Ethereum full node. As a result, I also set up and run an Ethereum full node from scratch. The entire post consists of four parts: Setup and run an Ethereum full nodeHardware Software OS Installation Ethereum Node Clients Installation Setup and run a Docker engine Setup and run an Arbitrum node

Jan 27, 2023
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